Bankruptcy Concerns
Sometimes the late fees, high annual percentage rates (APRs), and universal default overcome consumers who frequently do not pay off their debt, and the customer declares bankruptcy. If a customer files for bankruptcy, the credit card companies are required to forgive all or much of the debt, unless such discharge of debt is successfully challenged by one or more creditors, or blocked by a bankruptcy judge on legal grounds irrespective of creditors' challenges.
Because forgiveness of debt reduces likelihood of profit and continued survival, the companies are generally willing to offer another deal to the consumers in danger of bankruptcy. This deal consists of reduced APRs, removal of past late fees and penalty charges, and reaging the accounts so that the credit agencies see them as late accounts.
Read more about this topic: Credit Card Debt
Famous quotes containing the words bankruptcy and/or concerns:
“You must get your living by loving. But as it is said of the merchants that ninety-seven in a hundred fail, so the life of men generally, tried by this standard, is a failure, and bankruptcy may be surely prophesied.”
—Henry David Thoreau (1817–1862)
“In common with other rural regions much of the Iowa farm lore concerns the coming of company. When the rooster crows in the doorway, or the cat licks his fur, company is on the way.”
—For the State of Iowa, U.S. public relief program (1935-1943)